The emerging debt trap - The Hindu
I am not any financial wizard nor having any Ph.d in International Finance !!!
But after reading the news report in the Hindu on 29th June “India has to repay $172 billion debt by March 2014” followed by its editorial report on July 3 “The emerging debt trap”, I think we need to ask ourselves some relevant questions. The first question that came to my mind is whether the newspaper through its editorial staff is trying to influence the readers and public on the desirability and absolute necessity of FDI, at the behest of the management, bureaucrats and political bosses. There is a convergence of interests of all the above classes and shared with Indian corporates and MNC’s. Let us consider the report to be depicting the actual facts & figures regarding debt, and let us further analyze certain factual statements in this report
The EVIL Design of the DEVELOPED Countries –Falling Rupee !!!
(a) “First, the reason India has accumulated such a huge short term debt stock is that “cheap money at virtually zero interest rate” was supplied in abundance by western central banks, especially the U.S. Federal Reserve, post 2008.”
(b) “Of course, the developed world followed an easy liquidity policy to save their own economies, threatened by the worst recession since the Great Depression.”
(c) “But many emerging market economies ended up walking into what can only be described as a “cheap money trap.”
“Cheap money at virtually zero interest rate” means just PRINT CURRENCY and use it for giving CREDIT. (a) and (b) points to this action of Western Central Banks and the US Federal Reserve. The editorial itself is of the view that it is a ‘trap’ ie ‘cheap money trap’. Which means the Western nations including the US is trapping the ‘ordinary citizens’ of countries like India, which is making their daily life difficult . One of the effects is that on a daily basis we are forced to deal with uncertain prices of essential commodities !!!
It looks like there are many grey areas in International Finance. If money is lent at zero interest rate, what is the advantage to the lending nations?. Is it similar to recent newspaper advertisement ,announcing Samsung Galaxy range of products at zero-interest EMI.? By taking such credit, was Indian Govt forced to by their produces, maybe not essential to the country and without merit?. It is reported that the bulk of this cheap credit were gobbled up by Indian corporates. ? Is this the reason why Reliance is hell bent on getting a price increase for gas ? To service/pay back such debts? If corporates had taken this debt, are all transactions perfect and transparent, not causing any kind of harm to the Indian public.? These kind of financial transactions between nations, smacks of the drug peddler selling drugs at a cheap rate, to have more users and suddenly increasing the prices, to make a killing. Another example worth mentioning was the behavior of Reliance telecom in the initial phases of the mobile phone usage in India.
It is a puzzle, why our seasoned politicians backed by experienced bureaucrats and knowledgeable ‘academicians’ should willingly walk into such a ‘death-trap’ spread out by the ‘civilized’ Western Democracies, taking along with them the people of India , pushing the multitudes into miserable conditions. Is it because, ultimately the ordinary people only suffer, the elite class of people having stashed away in advance their stuff for a rainy day ?. It is also likely that the class of people mentioned beforehand are corrupted and poisoned by Western influence in ALL ways !!!! (In the West itself, many ordinary citizens are depending on soup kitchens and charity)
There remains a GREATER PUZZLE. How American economy alone is improving, when almost all nations in the world are struggling with unemployment and negative or standstill or marginal growth? A report from the US is as follows :- “The Fed is considering scaling back the bond-buying program because of its increasingly up-beat view of the economy. In its statement, the Fed said the downside risk to the jobs market had "diminished." “ Is this the reality and truth in US, for the ordinary citizen there ? (Ref :http://www.cleveland.com/business/index.ssf/2013/06/investors_dump_stocks_and_bond.html )
http://www.thehindu.com/todays-paper/tp-opinion/the-emerging-debt-trap/article4875083.ece
http://www.thehindu.com/todays-paper/india-has-to-repay-172-billion-debt-by-march-2014/article4861985.ec
I am not any financial wizard nor having any Ph.d in International Finance !!!
But after reading the news report in the Hindu on 29th June “India has to repay $172 billion debt by March 2014” followed by its editorial report on July 3 “The emerging debt trap”, I think we need to ask ourselves some relevant questions. The first question that came to my mind is whether the newspaper through its editorial staff is trying to influence the readers and public on the desirability and absolute necessity of FDI, at the behest of the management, bureaucrats and political bosses. There is a convergence of interests of all the above classes and shared with Indian corporates and MNC’s. Let us consider the report to be depicting the actual facts & figures regarding debt, and let us further analyze certain factual statements in this report
The EVIL Design of the DEVELOPED Countries –Falling Rupee !!!
(a) “First, the reason India has accumulated such a huge short term debt stock is that “cheap money at virtually zero interest rate” was supplied in abundance by western central banks, especially the U.S. Federal Reserve, post 2008.”
(b) “Of course, the developed world followed an easy liquidity policy to save their own economies, threatened by the worst recession since the Great Depression.”
(c) “But many emerging market economies ended up walking into what can only be described as a “cheap money trap.”
“Cheap money at virtually zero interest rate” means just PRINT CURRENCY and use it for giving CREDIT. (a) and (b) points to this action of Western Central Banks and the US Federal Reserve. The editorial itself is of the view that it is a ‘trap’ ie ‘cheap money trap’. Which means the Western nations including the US is trapping the ‘ordinary citizens’ of countries like India, which is making their daily life difficult . One of the effects is that on a daily basis we are forced to deal with uncertain prices of essential commodities !!!
It looks like there are many grey areas in International Finance. If money is lent at zero interest rate, what is the advantage to the lending nations?. Is it similar to recent newspaper advertisement ,announcing Samsung Galaxy range of products at zero-interest EMI.? By taking such credit, was Indian Govt forced to by their produces, maybe not essential to the country and without merit?. It is reported that the bulk of this cheap credit were gobbled up by Indian corporates. ? Is this the reason why Reliance is hell bent on getting a price increase for gas ? To service/pay back such debts? If corporates had taken this debt, are all transactions perfect and transparent, not causing any kind of harm to the Indian public.? These kind of financial transactions between nations, smacks of the drug peddler selling drugs at a cheap rate, to have more users and suddenly increasing the prices, to make a killing. Another example worth mentioning was the behavior of Reliance telecom in the initial phases of the mobile phone usage in India.
It is a puzzle, why our seasoned politicians backed by experienced bureaucrats and knowledgeable ‘academicians’ should willingly walk into such a ‘death-trap’ spread out by the ‘civilized’ Western Democracies, taking along with them the people of India , pushing the multitudes into miserable conditions. Is it because, ultimately the ordinary people only suffer, the elite class of people having stashed away in advance their stuff for a rainy day ?. It is also likely that the class of people mentioned beforehand are corrupted and poisoned by Western influence in ALL ways !!!! (In the West itself, many ordinary citizens are depending on soup kitchens and charity)
There remains a GREATER PUZZLE. How American economy alone is improving, when almost all nations in the world are struggling with unemployment and negative or standstill or marginal growth? A report from the US is as follows :- “The Fed is considering scaling back the bond-buying program because of its increasingly up-beat view of the economy. In its statement, the Fed said the downside risk to the jobs market had "diminished." “ Is this the reality and truth in US, for the ordinary citizen there ? (Ref :http://www.cleveland.com/business/index.ssf/2013/06/investors_dump_stocks_and_bond.html )
http://www.thehindu.com/todays-paper/tp-opinion/the-emerging-debt-trap/article4875083.ece
http://www.thehindu.com/todays-paper/india-has-to-repay-172-billion-debt-by-march-2014/article4861985.ec
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